After tech sell-offs following the Ukrainian war and Fed’s policy tightening, the International Business Machines Corporation (NYSE:IBM) is making a comeback. Since staging the estimates’-beating results in the fourth-quarter results announced on January 24, IBM failed to replicate gains. The stock traded at a high of $138 post-earnings at the start of February before crashing to a bottom of $118.9.
IBM’s lackluster stock performance this year comes after another turbulent year 2021, posting only 6.2% gains. This is way below the 28.7% gains in the benchmark S&P 500 index. Factoring dividend payments, the shares returned about 11.6% in the year, still below the benchmark index.
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The limited returns underlined a struggle by IBM to grow earnings and profits. The latest estimates’-beating earnings is boosting the stock, although it remains to be seen how the company will ride the torrid macroeconomic environment. At the current trading of $131, the stock is on its way up, with the technical indicators supporting a further rise.
Moving averages join support for IBM as it clears $127 resistance
On the daily chart, the 50-day and 100-day moving averages have joined support for IBM. This occurs after the stock cleared the $127 which was acting as a resistance before.
With the current trading at around $131, the only way is up for IBM, with the next resistance in sight at $138. Investors should look to buy the stock at the current level or after a short retracement towards $127 while the support holds intact.
Summary
IBM underperformed the S&P 500 index last year as it struggled to grow earnings. In its fourth-quarter results, the company beat estimates which boosted the stock.
However, an uncertain macroeconomic environment weakened it, but recovery is underway. The stock is a buy after breaking above $127 resistance while moving averages offer support. The target is at $138.
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Source: https://invezz.com/news/2022/03/29/moving-averages-join-support-for-ibm-time-to-buy/